General Costs Rules Apply To Appeal Against Bankruptcy Order

The High Court has held that Rule 12.2 of the Insolvency Rules 1986 ("IR 1986"), which provides that costs incurred in bankruptcy proceedings are to be regarded as expenses of the bankruptcy, is not intended to apply to appeals against bankruptcy orders (Cooke v Dunbar Assets Plc [2016] EWHC 1888 (Ch)).

The bankrupt argued that his appeal costs were directly associated with the proceedings issued by the petitioning creditor, and were therefore recoverable from the defendant. It was the defendant's submission that, if the Court held that the costs of a bankrupt's unsuccessful appeal were recoverable from the estate in bankruptcy, the result would be that bankrupts would be encouraged to appeal against bankruptcy orders at the expense of the creditors (as their costs would...